Privatization of Banks

The RBI recently issued a warning that the big-bang privatisation of public sector banks could have a negative net impact.

Findings

• Although public sector banks have performed better in fostering financial inclusion, private sector banks (PVBs) are more effective at maximising profits.
• Public sector banks (PSBs) have been essential in accelerating financial investments in low-carbon sectors and advancing the green transition in nations including Brazil, China, Germany, Japan, and the European Union.
• In contrast to private sector banks, PSBs were not solely driven by the goal of maximising profits and instead included the desirable goals of financial inclusion in its target function.
• PSB lending's countercyclical functions, in recent years, the market has grown more confident in these banks.
• Despite criticism for having poor balance sheets, research indicates that they fared extremely well throughout the COVID-19 pandemic shock.

Government Measures:

The government's methodical approach to privatisation might ensure that the societal goal of monetary transmission and financial inclusion was not compromised.

• Recent massive mergers of PSBs have led to industry consolidation, generating stronger, more resilient, and more competitive banks.
• By 2020, there were only 12 PSBs when the government combined 10 nationalised banks into four sizable institutions.
• The National Asset Reconstruction Company Limited (NARCL) establishment would assist in eradicating the historical burden of bad loans off their balance sheets.
• The recently established National Bank for Financing Infrastructure and Development (NABFiD) would offer a different route for funding infrastructure, allaying PSBs' worries about asset liability mismatch.

What is 'Privatisation'?

• Privatization is the process of transferring ownership, assets, or businesses from the public to the private sector.
• The corporation or business is no longer owned by the government.
• It is thought to increase the company's efficiency and objectivity, things that a government-run business would not care about.
• In the landmark reforms budget of 1991, commonly referred to as the "New Economic Policy" or "LPG policy," India opted for privatisation.

Need for Privatisation

• Amid the pandemic, there are heightened high non-performing assets (NPAs) and stressed assets.
• To lessen their numbers through privatisation and strengthen the strong banks in order to ease the burden of support.
• Mergers of ineffective banks that improve management practises
• No political meddling; quick decision-making.
• Increased profitability and shareholder accountability.
• Enhances foreign direct investment (FDI) or investment inflow.
• Narasimham Committee (33% proposed government stakes), P J Nayak Committee (below 50%), RBI Working Group, etc. all recommended it.
• Improved technological adoption by private banks

Why is government focusing on Privatisation??

• Minimizing governance: Where private enterprise is comparatively more capable, the government tries to limit its involvement in certain fields.
• Asset Reconstruction Company, which was established to address the financial crisis, is another example of this market-driven strategy.
• Public banks do poorly in terms of profitability, market capitalization, and dividend history.
• Non-performing assets (NPAs) and stressed assets have grown in number, particularly during the pandemic.
• Privatization may be one of the best ways out as the government is making every effort to prevent the nation from entering a deficit financing mode.

Arguments Against

• Performance difficulties (operational problems at Lakshmi Vilas Bank, questionable loan sanctions at ICICI Bank, the Yes Bank case, etc.)
• This action will encourage crony capitalism and financial exclusion.
• Savings held by households will be less secure as a result of the removal of the government guarantee backing the PSB deposits.
• Under NPA Reporting, the RBI's 2015 Asset Quality Review worries about a successful divestiture.
• defeat of the financial inclusion objective (failed Priority Lending Targets).
• refusal to share in the social obligations of government (Violation of DPSP under Article 38).
• Scheduled Castes, Scheduled Tribes, and Other Backward Classes (OBC) employment possibilities may decrease as a result of privatisation because the private sector does not adhere to reservation policies for the disadvantaged groups.

Way forward

Economic theory has come a long way from the common viewpoint that privatisation is a cure-all for all evils to accept that a more nuanced approach is needed while pursuing it. Only extremely poor performing PSBs should be opted for privatization and others should be reformed administratively and technologically for financial inclusion and economic growth.

These changes would probably contribute to the PSBs' continued strength.

Ban on VLC Media Player

India has outlawed access to the Video LAN Client (VLC) Media Player website.

According to VLC's data, India has outlawed its website from February 2022.

About the VLC

When personal computers started to become more common in Indian homes as a result of information technology breakthroughs in the late 1990s, VLC became increasingly popular in that country.

• VLC is free and open source, supports all file types without the need for extra codecs, and connects quickly with various platforms and streaming services.
• The VLC website is no longer accessible, although the VLC software is still downloadable from Google Play and Apple Stores.
• Concerning the restriction on the VLC website, civil society organisations have regularly submitted Right to Information (RTI) requests to the Ministry of Electronics and Information Technology (MeitY).
• But the Ministry has consistently responded to these requests by saying that "no information is available."
• A warning reading "The website has been prohibited as per the order of Ministry of Electronics and Information Technology under Information Technology Act, 2000" was visible when the website was previously visited.

Reasons for Ban:

• China's Interference: According to a report from cybersecurity company Symantec published in April 2022, Cicada, a hacker organisation purportedly supported by China, has been utilising the VLC Media Player to distribute dangerous malware loader.
• Safe Server: Although the VLC website has been blocked, you may still download the mobile app since app store servers are thought to be safer than the servers that house the desktop versions.

When can the Government Ban Online Content from the Public?

On the internet, content can be censored in one of two ways:

Executive: The Information Technology Act of 2000's Section 69A:

• If it is necessary or appropriate to do so in the interest of India's sovereignty and integrity, defence, security, friendly relations with other states, or public order, or to prevent incitement to the commission of any cognisable offence, Section 69A gives the government the authority to direct an intermediary to "block for access by the public" any information generated, transmitted, received, stored, or hosted in any computer resource.
• The Constitution's Article 19(2) gives Section 69A the authority to impose reasonable limitations on the basic right to free speech and expression
• Courts in India have the authority to order intermediaries to remove content from India in order to give the victim or plaintiff an appropriate remedy.
• For instance, courts may instruct internet service providers to ban access to websites that host pirated content and breach the copyright of the plaintiff.

What is the Procedure for Blocking Content Online?

• The Information Technology (Procedure and Safeguards for Restricting for Access of Information by Public) Rules, 2009 (IT Rules, 2009), which were created in accordance with Section 69A of the Information Technology Act, 2000, contain detailed instructions for blocking content.
• Only the Central government, not the State government, has the authority to order intermediaries to directly prohibit access to online information.
• The blocking order is forwarded to the central government's "Designated Officer" by a "Nodal Officer" appointed by central or state authorities.
• The nodal officer's request is examined by the designated officer as a member of a committee.
• Members of the Cert-In, Information and Broadcasting, Home Affairs, and Law and Justice Ministries are represented on the committee.
• A request for clarifications and responses is sent to the content's author or host.
• The committee then recommends whether or not the nodal officer's request should be granted.
• The designated officer may instruct the intermediary to delete content if the MeitY approves this recommendation.

What are Government’s Initiatives for Cyber Security?

• Cyber Surakshit Bharat Initiative
• Cyber Swachhta Kendra
• Online cybercrime reporting portal
• Indian Cyber Crime Coordination Centre (I4C)
• National Critical Information Infrastructure Protection Centre (NCIIPC)
• Information Technology Act, 2000

Way forward

Transparency:

• According to Rule 16 of the IT Rules, 2009, full secrecy must be kept with regard to any requests or actions taken in accordance with those rules.
• Since it is unclear why VLC has been disabled, this should be reviewed and a measure of transparency introduced.

Possibility of Reply:

• The rules of natural justice are broken when the creator or host isn't given a chance to provide clarifications or responses.
• The inventor or host should be given enough time to present his response before the appropriate authority.

Effectiveness of the review committee:

• The Examine Committee, which is mandated to meet every two months to review orders, has highlighted that none of the committee's conclusions has been contested.

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Megalodon

According to research, ancient Megalodon sharks were able to devour a whale in a few bites.

About Megalodon

• Otodus megalodon is its scientific name.
• It is a mackerel shark species that were extinct millions of years ago.
• In the past 23 million to 2.6 million years, it inhabited the waters.
• It was the biggest shark to ever traverse the oceans of the planet.

Description

• Around 70 tonnes, or the equivalent of 10 elephants, would have been the weight of the enormous transoceanic predator.
• Its typical cruising speed was higher than that of modern sharks.
• It was capable of migrating over several oceans.
• It was roughly 50 feet from nose to tail, making it larger than a school bus.
• Today's great white sharks, in contrast, can reach a maximum length of about 15 feet.

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